Economics Principles for a Changing

World 4th Edition Chiang Test Bank

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1. An economic institution that combines factors of production into outputs for consumers
is:
A) an industry.
B) a plant.
C) a firm.
D) multinational.

2. A firm is an economic institution that transforms _____ of production into _____ for
consumers.
A) inputs; outputs
B) inputs; resources
C) factors; inputs
D) outputs; outputs

3. Which goal BEST explains why entrepreneurs seek to meet a market need?
A) to earn a profit
B) to show altruism
C) to meet a legal requirement
D) to fulfill a vow

4. _____ possess most of the legal rights of individuals and can issue stock to raise capital.
A) Sole proprietors
B) Partnerships
C) Corporations
D) Sole proprietors, partnerships, and corporations

5. Jim Delaney employs five people to make pizzas for his neighborhood. He makes
$4,000 in profit per month, which he pays to himself. This firm is an example of a:
A) sole proprietorship.
B) partnership, because he has five employees.
C) corporation, because he sells his pizzas to the public.
D) nonprofit corporation.

6. Which statement regarding American businesses is TRUE?

A) Most American businesses are corporations.
B) Most American businesses are partnerships.
C) Corporations sell most of their products and services in the United States.
D) Sole proprietorships sell most of their products and services in the United States.

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 7. Sole proprietors and partnerships share the characteristic of:
A) the ability to raise large amounts of capital.
B) unlimited liability.
C) being difficult to establish.
D) issuing stock.

8. ______ are more numerous, but ______ sell more goods and services.
A) Corporations; partnerships
B) Corporations; sole proprietorships
C) Sole proprietorships; corporations
D) Corporations; entrepreneurs

9. Which is an advantage of owning a sole proprietorship?

A) unlimited liability
B) easiness of start up
C) difficulty in raising large amounts of capital
D) having full responsibility for all aspects of the business

10. The characteristic of a corporation that most encourages investors to invest large
amounts of money in it is:
A) double taxation.
B) limited liability.
C) diffusion of ownership.
D) access to international markets.

11. A form of business that is owned jointly by several owners and in which there is
unlimited liability is called a:
A) sole proprietorship.
B) partnership.
C) corporation.
D) cooperative.

12. Limited liability is important in encouraging business investment because:

A) it reduces income taxes.
B) it lowers risks to those contributing funds to the venture.
C) any funds contributed to a limited liability company earn a high return.
D) it raises the liquidity of funds.

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13. How are corporations different from partnerships?
A) Corporations are an example of a firm but partnerships are not.
B) Corporations have limited liability but partnerships have unlimited liability.
C) Corporations transform factors of production into products for consumers but
partnerships do not.
D) Partnerships have the legal rights of individuals but corporations do not.

14. Jim Delaney sold his pizza firm to an investor who then sold stock to the public. Jim
now earns a salary of $5,000 a month and all the profits are distributed to the
stockholders. This firm is an example of a:
A) sole proprietorship.
B) partnership because Jim Delaney partnered with an investor.
C) corporation.
D) nonprofit corporation.

15. Eve runs a yoga studio. She is considering expanding her operation, but to do so, she
needs to double the size of her existing building. She is concerned that her insurance
will increase significantly due to the increased exposure to liability. And, she alone
would bear the burden of that if an accident were to occur. Based on the above
information, Eve's studio should be considered a _____ and the decision to expand a
_____ decision.
A) partnership; short-run
B) corporation; long-run
C) sole proprietor; long-run
D) partnership; long-run

16. Blast-Off owns a nuclear power plant in northern Utah that suffers a nuclear accident,
with $50 billion in damages. Blast-Off declares bankruptcy and pays out $5 billion in
damages, but it is no longer liable for any further damages. From this information, it is
clear that, before the bankruptcy, the nuclear power plant was a:
A) sole proprietorship.
B) partnership.
C) corporation.
D) nonprofit corporation.

17. The limited ability to raise capital is a disadvantage of what type of business structure?
A) sole proprietorship
B) partnership
C) corporation
D) government-owned business

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18. What do all three types of business structure have in common?
A) They all have limited liability.
B) They all can sell stock.
C) They all dissolve upon the death of the chief executive officer.
D) They all react to the profit incentives of the market.

19. In a partnership, legal responsibility for all debts of the partnership are:
A) shared by the founding owners.
B) shared by all the partners.
C) shared by the stockholders.
D) limited to the investment in the partnership.

20. The owners of a corporation are:

A) responsible for all the debts of the corporation.
B) the shareholders.
C) the employees of the corporation.
D) the board of directors.

21. A partnership of two people has which characteristic?

A) The law releases each partner from legal liabilities.
B) Each person has 50% liability.
C) Each person has unlimited liability.
D) It is much more difficult for a company to specialize with two persons.

22. Ownership in corporations is issued in the form of:

A) partnership agreements.
B) loan documents.
C) bonds.
D) shares of stock.

23. Craig and his friend Jay own Cut Rate Legal Services. They make $16,190 in profits per
month, which they split between themselves. Craig and Jay carry a hefty insurance
policy because they have unlimited liability. Cut Rate Legal Services is an example of a:
A) sole proprietorship.
B) partnership.
C) corporation.
D) limited liability company.

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24. A customer slipped and fell on a wet floor at Melvin's T-Shirt Emporium. Melvin was
found liable for the customer's injuries and had to pay $30,000 in medical bills for the
customer out of his own pocket. Melvin's T-Shirt Emporium is a:
A) sole proprietorship.
B) partnership.
C) corporation.
D) limited liability company.

25. Ian owned his own dry cleaning shop, but he later sold it to his cousin Norman. Norman
incorporated the business and is the only stockholder. Which of these is the MOST
likely reason for the incorporation?
A) Norman wanted to sell shares of stock to raise capital.
B) Norman wanted to be able to hire workers.
C) Norman wanted to have limited liability.
D) Norman wanted to be able to sell the business when he retired.

26. Profits are equal to the difference between _____ and _____.
A) total revenue; marginal costs
B) marginal revenue; marginal costs
C) total revenue; total costs
D) total revenue; explicit costs

27. The assumed goal of any firm is to:

A) minimize cost.
B) maximize revenue.
C) minimize taxes.
D) maximize profit.

28. Economists explicitly assume that the primary objective of firms is to maximize:
A) sales.
B) market share.
C) shareholder wealth.
D) profits.

29. Most economists assume that firms behave _____ and that their objective is _____.
A) rationally; profit maximization
B) rationally; predictable profits
C) irrationally; profit maximization
D) rationally; sales maximization

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30. Economists assume that firms try to _____. Other theories suggest that firms might,
among other things, try to _____.
A) maximize revenue; maximize profits
B) maximize profits; maximize sales
C) maximize market share; maximize satisfactory profits
D) maximize satisfactory profits; maximize market share

31. The price of a mango is $2 and a farmer sells 2,000 mangos. However, the costs to the
farmer are $400 for labor, $1,600 for rent, and $2,000 for advertising. Based on the
above information, the farmer:
A) makes $2,000 in profit.
B) loses $2,000 in profit.
C) makes $2,000 in total revenue.
D) makes $4,000 in total revenue.

32. All of these are explicit costs, EXCEPT:

A) salaries paid to employees.
B) business taxes paid by an entrepreneur.
C) the salary an entrepreneur could have earned in a corporate job.
D) money paid for raw materials.

33. The calculation for economic profit is total revenue minus:

A) implicit costs.
B) explicit costs.
C) implicit and explicit costs.
D) normal profits.

34. Which of the following is an implicit cost?

A) material cost
B) labor cost
C) opportunity cost
D) overhead cost

35. Economic costs are the sum of _____ and _____.

A) sunk costs; implicit costs
B) explicit costs; implicit costs
C) explicit costs; sunk costs
D) sunk costs; marginal costs

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36. All of these are included in implicit costs, EXCEPT:
A) depreciation.
B) depletion of business assets.
C) opportunity costs.
D) expenditures for raw materials.

37. Money that is a real cost to the company but that is not actually paid at the time a
machine wears down is called a(n):
A) explicit cost.
B) implicit cost.
C) sunk cost.
D) total cost.

38. Explicit costs are called _____ costs and implicit costs are _____ costs.
A) sunk; opportunity
B) opportunity; out-of-pocket
C) out-of-pocket; opportunity
D) opportunity; sunk

39. Economists calculate profits as total revenue minus:

A) depreciation.
B) explicit and implicit costs.
C) explicit costs and depreciation.
D) costs of raw materials.

40. Which of the following is NOT considered an explicit cost?

A) electricity
B) depreciation on equipment
C) building insurance
D) rent

41. A normal rate of return on capital:

A) is a return just sufficient to keep investors satisfied.
B) sends a signal to investors to use their capital elsewhere.
C) does not allow a business to keep its capital equipment in the long run.
D) represents a positive economic profit.

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42. Money that a firm spends on health care for employees is a(n):
A) explicit cost.
B) implicit cost.
C) opportunity cost.
D) surplus cost.

43. The cost incurred by a firm through the depreciation of an apartment complex is a(n):
A) explicit cost.
B) implicit cost.
C) sunk cost.
D) surplus cost.

44. All of these are examples of implicit costs, EXCEPT:

A) office rent expenses.
B) depreciation expenses.
C) earnings that an entrepreneur could have made in another job.
D) opportunity cost of a firm's capital.

45. Which of the following is NOT an explicit cost?

A) lease payments
B) insurance
C) office supplies
D) earnings that the owner could have earned at an alternate job

46. _____ are costs that have already been incurred and cannot be recovered.
A) Total costs
B) Implicit costs
C) Explicit costs
D) Sunk costs

47. Atomic Café has just opened a new, larger store across the street from its original
location. Which cost is a sunk cost for the café?
A) a newspaper advertisement promoting the new café
B) the additional thirty days of rent it had to pay for its old space due to production
delays in the new space, even though it only occupied the old space for five
additional days
C) the additional labor cost needed to staff the larger café
D) the increased cost of electricity due to the larger space

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48. Costs that cannot be recovered are:
A) implicit costs.
B) explicit costs.
C) sunk costs.
D) resource costs.

49. Which of these could occur in the short run?

A) Walmart opens a new store.
B) Walmart hires five new workers.
C) A new firm enters the retail industry.
D) Two firms leave the retail industry.

50. Money spent by a politician for a pollster who would determine the chances of the
politician's winning an upcoming local election is a(n):
A) explicit cost.
B) implicit cost.
C) sunk cost.
D) surplus cost.

51. Suppose a fast-food restaurant currently serves lunch and dinner and is trying to
determine if it should open for breakfast. Which cost is a sunk cost for this business?
A) a newspaper advertisement promoting breakfast
B) costs of the food items bought for breakfast
C) costs of the workers hired for the morning shift
D) electricity for morning hours

52. The phrase, “Stop throwing good money after bad,” best describes:
A) microeconomics.
B) sunk costs.
C) marginal pricing.
D) opportunity costs.

53. If you drop a course after the refund date, the nonrefundable tuition that you have paid
is:
A) a variable cost.
B) a marginal cost.
C) a fixed cost.
D) a sunk cost.

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54. Profits that are calculated using both implicit and explicit costs are called:
A) accounting profits.
B) normal profits.
C) economic profits.
D) accounting profits, normal profits, and economic profits.

55. Suppose that Bob has left a job that paid $50,000 per year in order to open a new sponge
business. His insurance cost is $5,000, his material cost is $25,000, his lease payments
are $10,000, and his sales revenue is $90,000. Bob's economic profit is:
A) $50,000.
B) $90,000.
C) $40,000.
D) $0.

56. To pursue her goal of being a business owner, Mary left a job that paid $40,000 per
year. At the end of her first year in business, her cash revenues summed to $90,000, and
her explicit costs were $50,000. Also, in order to fund her business startup, Mary cashed
in a $20,000 certificate of deposit that was providing a yield of 5%. Ceteris paribus,
Mary's economic profit is:
A) $40,000.
B) $1,000.
C) –$1,000.
D) $0.

57. Wendy leaves her job as a dancer to start her own dance studio. As a dancer, she made
$34,000 per year. During the studio's first year she paid $4,300 per year for insurance,
$1,846 for music and licensing fees, $150 for a boom box, and $11,300 for rent and
utilities. She received $60,480 in tuition payments. Wendy's economic profit was:
A) $8,884.
B) $42,884.
C) $51,596.
D) $60,480.

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58. Larry left a job as an accountant making $40,000 a year to open his own business. Larry
now owns his own automotive repair shop and employs three mechanics. His total parts
and sales volume this year was $322,400. Because he is well known for his repair
expertise, he is also paid $5,200 per year by a local radio station to answer automotive
repair questions on Ask the Mechanic segment. His explicit costs for payroll, parts and
taxes, mortgage, and utilities are $290,160. Larry's economic profit is:
A) $32,240.
B) $37,440.
C) $327,600.
D) –$2,560

59. Sid has decided to leave his $70,000-a-year landscape design job and open a new kayak
business. His insurance cost is expected to be $2,000 per year. The kayaks he owns are
valued at $25,000, but he experiences 10% annual depreciation on them. He will also
use building space that he owns, but, to do so, he must give up the $10,000 per year in
rent he used to receive for the space. Revenue is expected to equal $100,000 per year.
Sid's economic profit is:
A) $84,500
B) $2,000
C) $82,500
D) $15,500

60. Normal profits are:

A) positive economic profits.
B) just sufficient to keep a firm in business over the long run.
C) negative economic profits.
D) zero accounting profits.

61. Which statement is NOT true?

A) Normal profits are the same as accounting profits.
B) Economic profits cannot be measured by accounting methods.
C) Normal profits are equal to zero economic profits.
D) Economic profits are always lower than accounting profits.

62. Which equation is correct?

A) Economic profit = Total revenue – Implicit costs
B) Economic profit = Total revenue – Opportunity costs – Implicit costs
C) Economic profit = Total revenue – Normal costs
D) Economic profit = Total revenue – Explicit costs – Implicit costs

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63. Profits in excess of both explicit and implicit costs are:
A) normal profits.
B) accounting profits.
C) economic profits.
D) zero economic profits.

64. Arlene makes earrings in the shape of the mascot of a local university. Last year, Arlene
made 250 pairs of earrings, which she sold to the university bookstore for $10 each.
Arlene works out of her home; her only cost is $3 per pair of earrings for materials and
$85 for tax help. If Arlene did not produce earrings, she would spend her time
babysitting her nephews and make about $500 per year. Which statement is true?
A) Arlene's economic profit is $1,665.
B) Arlene's total revenue is $2,500.
C) Arlene's total implicit costs are $835.
D) Arlene's accounting profit is $1,165.

65. A normal profit is equal to:

A) revenue minus explicit cost.
B) revenue minus opportunity cost.
C) zero economic profit.
D) explicit cost minus implicit cost.

66. A local business earned total revenue of $100,000 against economic costs of $85,000,
with the difference going to investors. If investors put in $200,000 and expect a 5%
return on their investment, this business is:
A) earning a positive economic profit.
B) earning a normal economic profit.
C) earning a negative economic profit.
D) earning a positive accounting profit but negative economic profit.

67. In economic terms, the short run is:

A) no more than six months.
B) no more than two years.
C) the time over which at least one factor of production is fixed.
D) the time period in which factors of production are variable.

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68. Which factor of production is usually assumed to be variable in the short run?
A) state of technology
B) number of machines
C) length of workers' shifts
D) plant capacity

69. Which of these is NOT typical of the long run?

A) Firms may enter or leave the industry.
B) A firm may add facilities.
C) Output will vary only with changes in the labor force.
D) The size of an industry may change.

70. In terms of the actual time period, the long run is probably the shortest for a(n):
A) capital-intensive company.
B) large public utility company.
C) industry incapable of quick adaptations to market demand.
D) small business providing house-painting services.

71. Which of the following examples represents the short run?

A) Walmart builds another store.
B) Ford asks its workers to work overtime.
C) Sea-Land increases the size of its cargo fleet by 20%.
D) A university builds two classroom buildings.

72. If a firm can change all of its factors of production, then it is operating in:
A) the short run.
B) the mid-term run.
C) the long run.
D) balance.

73. In the short run:

A) all costs are variable.
B) all costs are fixed.
C) at least one cost is fixed.
D) average total cost is fixed.

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74. The short run is:
A) a year or less.
B) up to two years.
C) the period of time in which the firm cannot change its use of at least one input.
D) the period of time during which the firm can alter its output.

75. A local university is considering the construction of a parking garage for which it has
yet to finalize design plans. This should be considered a _____ decision for the
university.
A) short-run
B) long-run
C) intermediate-run
D) very short-run

76. Which of these occurs in the long run?

A) A grocery store expands its hours of operation.
B) A restaurant hires another server.
C) An aircraft company adds another shift.
D) A new movie theater is built.

77. Assuming fixed quantities of other inputs, the total product curve relates:
A) output to variable input.
B) output to variable cost.
C) output to total cost.
D) fixed cost to variable cost.

78. (Table) Based on the table, diminishing returns occur when hiring the _____ worker.

A) first
B) second
C) third
D) fourth

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79. The total product curve:
A) is a relationship between total output and input.
B) is fixed in the long run.
C) relates average cost to variable cost.
D) is negatively sloped in the early stages of production.

80. A typical total product curve goes through four stages. What is the correct order for
these stages?
A) increases at an increasing rate, increases at a decreasing rate, decreases, reaches a
maximum
B) increases at an increasing rate, increases at a decreasing rate, reaches a maximum,
decreases
C) increases at a decreasing rate, increases at an increasing rate, reaches a maximum,
decreases
D) increases at an increasing rate, reaches a maximum, increases at a decreasing rate,
decreases

81. Staci's Sign Shoppe makes signs for businesses. Staci is currently producing 210 signs
per week with three employees. She hires an additional worker and total output per
week rises to 328 signs. The marginal product of the last worker is _____ signs.
A) 82
B) 118
C) 210
D) 378

82. Staci's Sign Shoppe makes signs for businesses. Staci is currently producing 210 signs
per week with three employees. Staci hires an additional worker and total output per
week rises to 328 signs. At four workers, marginal product is _____ the average
product; thus, average product is _____.
A) equal to; unchanged
B) below; rising
C) above: falling
D) above; rising

83. The change in total product occurring when a variable input is increased and all other
inputs are held constant is:
A) average total cost.
B) marginal product.
C) average physical product.
D) marginal cost.

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84. Marginal product is:
A) total output divided by total input.
B) input divided by output.
C) the change in total output, given a change in labor input.
D) the change in total costs, given a change in labor input.

85. _____ is found by dividing total output by the number of workers employed to produce
that output.
A) Marginal cost
B) Average cost
C) Marginal product
D) Average product

86. Marginal product is defined as the:

A) change in output from hiring an extra worker.
B) total output divided by the number of workers hired.
C) change in the number of workers divided by the change in output.
D) number of workers hired divided by the total output.

87. The Wonderful Gadget Company produces 500 gadgets per week with 50 employees. It
hires an additional worker and output rises to 507 gadgets. The marginal product of the
last worker hired is _____ gadget(s).
A) 500
B) 507
C) 7
D) 1

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88. (Table) Based on the table, what is the marginal product of the third worker?

A) 7
B) 8
C) 9
D) 10

89. (Table) Based on the table, what is the average product of the sixth worker?

A) 8.5
B) 8
C) 7.75
D) There is not enough information to answer this question.

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90. (Table) Based on the table, what is the output with seven workers?

A) 50
B) 51
C) 54
D) 55

91. (Table) Based on the table, the marginal product for the fourth worker is:

A) 10.
B) 13.
C) 14.
D) 12.

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92. (Table) Based on the table, as long as marginal product is greater than average product:

A) the average product declines.

B) the marginal product will be negative.
C) the average product rises.
D) the average product will be negative.

93. (Table) Based on the table, increasing marginal returns take place for:

A) the first three workers.

B) the first four workers.
C) all ten workers.
D) the first five workers.

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94. (Table) Based on the table, diminishing marginal returns begin with the:

A) sixth worker.
B) fifth worker.
C) seventh worker.
D) eighth worker.

95. (Table) Based on the table, negative marginal returns occur beginning with the:

A) fifth worker.
B) seventh worker.
C) ninth worker.
D) tenth worker.

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96. Suppose that the twenty-third worker generates a marginal product equal to eight boxes
of output and that the average product of the twenty-third worker employed is five
boxes per worker. We can conclude that:
A) average product is rising.
B) marginal product is falling.
C) average product is neither rising nor falling.
D) marginal product is neither rising nor falling.

97. When a new worker hired adds more to total output than the previous worker hired, you
have:
A) increasing marginal returns.
B) increasing marginal costs.
C) decreasing marginal returns.
D) constant marginal costs.

98. Mingma hired another cashier to work in her clothing store; her sales after the hire more
than doubled. Hiring the second worker resulted in:
A) diminishing marginal returns.
B) constant marginal returns.
C) increasing marginal returns.
D) negative marginal returns.

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99. (Figure: Determining Marginal Returns) Based on both the table and the figure, adding a
third worker leads to:

A) increasing marginal returns.

B) diminishing marginal returns.
C) constant marginal returns.
D) negative marginal returns.

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100. (Figure: Determining Marginal Returns) Based on both the table and the figure, adding a
fifth worker leads to:

A) increasing marginal returns.

B) diminishing marginal returns.
C) constant marginal returns.
D) negative marginal returns.

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101. (Figure: Determining Marginal Returns) Based on both the table and the figure, if a
tenth worker is added, this leads to:

A) increasing marginal returns.

B) diminishing marginal returns.
C) constant marginal returns.
D) negative marginal returns.

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102. (Figure: Production of Bowling Balls) Based on the figure, the firm experiences
diminishing returns to labor after _____ workers and negative returns after _____
workers.

A) 2; 7
B) 7; 10
C) 5; 13
D) 5; 7

103. (Figure: Production of Bowling Balls) What is the total product if 10 workers are used?

A) 34 units
B) 12 units
C) 22 units
D) 120 units

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104. Negative marginal returns are encountered when:
A) total product falls as a firm hires more workers.
B) average product is negative.
C) marginal product is positive.
D) total product is negative.

105. (Table) The table provides short-run total product data for John's Salsa Company. What
is the marginal product of the third employee?

A) 10
B) 33
C) 11
D) 13

106. (Table) Based on the table, what is the average total product when John's Salsa
Company hires three people?

A) 10
B) 33
C) 11
D) 13

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107. (Table) Based on the table, at what point does John's Salsa Company face diminishing
marginal returns?

A) when one person is hired

B) when two people are hired
C) when three people are hired
D) when four people are hired

108. In general, marginal product equals average product at:

A) the maximum marginal product.
B) the minimum marginal product.
C) the minimum average product.
D) the maximum average product.

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109. Based on the data provided in the table, which would be the correct total product curve
associated with the data?

A)

B)

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C)

D)

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110. (Table) Based on the table, the marginal product of the eighth worker is _____ bats.

A) 10
B) 8
C) 23
D) 14

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111. (Table) Based on the table, the average product of three workers is _____ bats.

A) 24
B) 22
C) 23
D) 25

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112. (Table) Based on the table, diminishing marginal returns occur when the _____ worker
is hired.

A) fifth
B) sixth
C) eighth
D) twelfth

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113. (Table) Based on the table, negative marginal returns occur when the _____ worker is
hired.

A) fifth
B) sixth
C) eighth
D) twelfth

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114. (Table) Based on the table, average product is at its maximum for the:

A) fifth worker.
B) third worker.
C) sixth worker.
D) seventh worker.

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115. (Table) Based on the table, the average product of ten workers is _____ bats.

A) 6
B) 60
C) 20
D) 200

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116. (Table: Production of Bowling Balls) How many workers would be used to produce 88
bowling balls?

A) 4
B) 12
C) 10
D) 8

117. When hiring additional workers reduces total output, the firm faces:
A) diminishing marginal returns.
B) increasing marginal returns.
C) increasing marginal and average products.
D) negative marginal returns.

118. When a firm experiences increasing marginal returns:

A) total output rises at a diminishing rate.
B) total output rises at an increasing rate.
C) average product falls.
D) marginal product falls.

119. A restaurant manager concludes that when he has too many servers on the floor, the
servers get into each other's way and fewer people get served. This shows the concept
of:
A) negative marginal returns.
B) increasing marginal returns.
C) diminishing marginal utility.
D) increasing average product.

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120. If each of your first seven employees adds more to output than a new worker hired, you
are experiencing:
A) returns to scale.
B) decreasing marginal returns.
C) increasing marginal returns.
D) diminishing marginal returns.

121. Joe's pizza hired a fourth worker, who made an additional ten pizzas per hour. Joe also
discovered that the number of pizzas made per worker per hour was five when four
workers were employed. We can conclude that Joe is experiencing:
A) decreasing marginal product of labor.
B) decreasing average product of labor.
C) increasing average product of labor.
D) increasing marginal product of labor.

122. Jen-Chi's Tea House produces 500 four-ounce packets of tea per week. Jen-Chi's
variable cost is $14.10 per packet and his fixed cost per week is $1,775. Jen-Chi's total
cost per week is:
A) $17.65.
B) $5,275.
C) $7,050.
D) $8,825.

123. If a firm has $10,000 in variable costs and no fixed costs, then the time period is
referred to as the:
A) market period.
B) short run.
C) long run.
D) very long run.

Page 37
124. (Table) Based on the table, the marginal cost of the fourth unit produced is:

A) $0.
B) $92.
C) $98.
D) $105.

125. Hannah owns an auto repair shop. She has incurred over $100,000 in startup costs and
currently faces fixed costs of $5,000 per month. She also has labor costs equal to $3,000
per month. Hannah earns revenue of $10,000 per month. Given this information,
Hannah should:
A) close her business since she will never make back the $100,000 she spent to start it.
B) close her business since she is losing $98,000.
C) continue to run her business since she is making a profit of $2,000.
D) continue to run her business since she is making a profit of $10,000 per month and
she can expect to earn back the startup costs over time.

126. King's Inc. produces 250 sweaters per week. The average variable cost per sweater is
$3.75 and average fixed costs are $1.50 per sweater. The total cost per week is:
A) $562.50.
B) $1,312.50.
C) $5.25.
D) $656.25.

127. If the variable cost for five shoes is $50 and the variable cost of six shoes is $80, which
statement is true?
A) The marginal cost for the sixth shoe is $80.
B) Total costs for the sixth shoe is $130.
C) Average variable cost of the sixth shoe is $10.
D) Average variable cost for the fifth shoe is $10.

Page 38
128. (Table) Based on the table, suppose the coffee plant experiences fixed costs of $35. At
two units of production, the firm would have total costs of:

A) $60.
B) $20.
C) $90.
D) $55.

129. (Table) Based on the table, the marginal cost of the second unit produced is:

A) $0.
B) $5.
C) $15.
D) $20.

130. If a firm has $9,000 of fixed costs and $21,500 of variable costs, then the time period
referred to is the:
A) long run.
B) short run.
C) very long run.
D) The answer cannot be determined from the information provided.

131. _____ is the price per unit times the number of units sold.
A) Total cost
B) Marginal cost
C) Marginal revenue
D) Total revenue

Page 39
132. If marginal cost (MC) is less than average total cost (ATC), then:
A) ATC is at its minimum.
B) ATC is increasing.
C) ATC is decreasing.
D) AFC is increasing.

133. Which of the following is equivalent to average variable cost (AVC)?

A) ATC + AFC
B) ATC + MC
C) ATC – MC
D) ATC – AFC

134. Average fixed costs (AFC):

A) will fall in the early stages of production but rise when capacity is maximized.
B) is constant at any given level of output.
C) falls continuously as output increases.
D) increases due to diminishing marginal returns.

135. The primary incentive for entrepreneurs to bring new technologies to the market is:
A) reducing average fixed cost.
B) reducing marginal cost.
C) increasing sales volume.
D) profit.

136. The change in total costs arising from the production of additional output is:
A) variable cost.
B) average fixed cost.
C) marginal cost.
D) average total cost.

137. Marginal cost (MC) will equal average total cost (ATC) at the point where the:
A) average variable cost is the lowest.
B) marginal cost is the lowest.
C) fixed cost is the lowest.
D) average total cost is the lowest.

Page 40
138. Regarding the short-run cost model, the vertical distance between the average total cost
(ATC) curve and the average variable cost (AVC) curve is:
A) marginal cost (MC).
B) average fixed cost (AFC).
C) variable cost (VC).
D) total cost (TC).

139. Which cost is a fixed cost for the first year of production?
A) the cost of plastic that increases as production increases
B) the cost of electrical utilities each month
C) the cost of additional temporary workers in case production
D) property taxes on a storage facility

140. Total costs are a combination of:

A) average fixed costs plus average variable costs.
B) fixed costs plus average variable costs.
C) fixed costs plus variable costs.
D) average fixed costs plus variable costs.

141. Variable costs:

A) do not vary with output.
B) are always greater than fixed costs.
C) are positive, even when a firm produces no output.
D) vary with output fluctuations.

142. _____ are independent of output.

A) Total costs
B) Fixed costs
C) Variable costs
D) Marginal costs

Page 41
143. (Table) Based on the table, _____ is the total cost when producing twenty-one units.

A) $850
B) $1,850
C) $2,050
D) There is not enough information to answer this question.

144. (Table) Based on the table, _____ is the average variable cost when output is twelve
units.

A) $5.36
B) $41.67
C) $60.00
D) $75.00

Page 42
145. (Table) Based on the table, output equals _____ when seven workers are employed.

A) 42
B) 54
C) 55.71
D) 7.71

146. In the short run, if output is zero, then total costs are:
A) zero.
B) equal to variable costs.
C) equal to fixed costs.
D) negative.

147. (Table) Based on the table, the total cost of producing fifty-four units of output is:

A) $1,250.
B) $500.
C) $2,000.
D) $1,750.

Page 43
148. (Table) Based on the table, the average fixed cost of producing forty units of output is:

A) $12.
B) $12.50.
C) $18.52.
D) $25.

149. (Table) Based on the table, the average variable cost of producing twenty-seven units of
output is:

A) $46.30.
B) $29.41.
C) $27.78.
D) $25.

Page 44
150. (Table) Based on the table, the average total cost of producing sixty-six units of output
is:

A) $30.30.
B) $7.58.
C) $22.73.
D) $25.

151. Given the information in the above table, fixed costs equal _____, marginal cost at two
units of production equal _____, and average variable costs at nine units of production
equal _____.

A) $50; $200; $88.89

B) $100; $100; $66.67
C) $0; $400; $200
D) $200; $100; $66.67

152. The formula for average fixed cost is:

A) FC/Q.
B) TC/Q.
C) FC/Q + VC/Q.
D) FC/Q + TC/Q.

Page 45
153. The formula for average total cost is:
A) FC/Q.
B) FC/Q + VC/Q.
C) VC/Q.
D) FC/Q ̶ VC/Q.

154. Marginal cost is calculated by:

A) adding fixed costs to variable costs.
B) dividing total cost by output.
C) dividing average variable cost by the change in output.
D) dividing the change in total cost by the change in output.

155. Fixed costs do NOT include:

A) electricity.
B) rent.
C) property taxes.
D) insurance.

156. Which equation is NOT correct?

A) TC = FC + VC
B) ATC = AFC + AVC
C) ATC = VC/Q
D) AFC = FC/Q

157. Average total cost can be found by:

A) adding fixed cost and variable cost.
B) dividing the change in total cost by the change in output.
C) dividing the change in output by the change in the number of workers.
D) adding average fixed cost and average variable cost together.

158. At 500 units of output, total cost is $50,000 and variable cost is $5,000. What does fixed
cost equal at 500 units?
A) $50,000
B) $5,000
C) $9,000
D) $45,000

Page 46
159. Assume that the fixed input is rent and the variable input is labor. Then marginal cost
would be equal to:
A) rental costs/output.
B) labor costs/output.
C) change in rental costs/change in output.
D) change in labor costs/change in output.

160. Marginal cost is equal to the change in:

A) average variable cost divided by the change in total output.
B) fixed cost divided by the change in total output.
C) variable cost divided by the change in total output.
D) average total cost divided by the change in total output.

161. In the short run, an example of a fixed cost is:

A) a property tax.
B) the cost of labor.
C) the cost of materials.
D) the cost of utilities.

162. In the short run, an example of a variable cost is:

A) a lease payment.
B) the cost of labor.
C) administrative overhead.
D) insurance.

163. Sam's Club can sell identical items at a lower price than Macy's because of Sam's
Club's:
A) higher rent costs.
B) government assistance.
C) lower average fixed costs.
D) higher variable costs.

164. In the short run, if output is declining:

A) average variable costs must be declining.
B) average fixed costs must be rising.
C) average total costs must be declining.
D) average variable costs must be rising.

Page 47
165. If the Clearwater Cotton Candy Company hypothetically lays off its workers and shuts
down, it incurs costs of $30,000. If it produces at full capacity, it incurs costs of
$90,000. One would conclude that:
A) fixed costs are $90,000.
B) variable costs at half capacity are $45,000.
C) fixed costs are $60,000.
D) the costs of variable inputs at full capacity is $60,000.

166. At 500 units of output, total cost is $100,000 and fixed cost is $50,000. What does
variable cost equal at 500 units?
A) $50,000
B) $5,000
C) $9,000
D) $45,000

167. When the Keep On Calling Cell Phone Company is at full capacity, it incurs costs of
$230,000. During the December shutdown period, when no cell phones are produced, it
incurs costs of $76,000. One can conclude that:
A) fixed costs are $230,000.
B) at full capacity, variable costs are $154,000.
C) fixed costs are $154,000.
D) variable costs at half capacity are $115,000.

168. When the Frame Factory is producing 1,500 frames, total cost is $225,000 and variable
cost is $180,000. What do average fixed costs equal at 1,500 units?
A) $30
B) $150
C) $45,000
D) $225,000

Page 48
169. Calvin is a college student who has identified the need his fellow students have for
transportation to and from a nearby store. He owns a van that can carry four people in
addition to himself; he pays $50 insurance costs per month. He has calculated that his
cost of transporting his fellow students will be $2.50 per student per round-trip ride,
assuming he has a full van. Given this information, which statement is correct,
assuming Calvin has a full van?

I. Calvin's average variable costs will be $15.

II. Calvin's marginal cost is constant at $2.50.
III. Calvin's average variable cost is constant at $2.50.
A) I only
B) II and III
C) II only
D) I and III

170. (Understanding Cost Curves) The figure looks MOST like a(n) _____ cost curve.

A) marginal
B) average total
C) average fixed
D) average variable

Page 49
171. (Figure: Understanding Cost Curves 2) Match the curves in the figure (lines A, B, and
C) with the correct cost curve name (average variable cost, average total cost, average
fixed cost, or marginal cost).

A) A = marginal cost; B = average variable cost; C = average total cost

B) A = average variable cost; B = average total cost; C = marginal cost
C) A = marginal cost; B = average fixed cost; C = average total cost
D) A = marginal cost; B = average total cost; C = average fixed cost

172. (Figure) The figure shows the cost curves for a representative firm. At an output level of
five units, the average fixed, variable, and average total costs, respectively, would be:

A) $120; $66.67; $186.67

B) $40; $80; $120
C) $66.67; $53.33; $120
D) $100; $120; $220

Page 50
173. Which curve is NOT bowl-shaped?
A) the average variable cost curve
B) the short-run average cost curve
C) the long-run average cost curve
D) the average fixed cost curve

174. As output increases, average total cost and average variable cost get closer to each other
because:
A) marginal cost increases.
B) average fixed cost decreases.
C) marginal cost equals average variable cost at its minimum point.
D) marginal cost equals average total cost at its minimum point.

175. The marginal cost curve:

A) intersects the average total cost curve at its minimum point.
B) intersects the average fixed cost curve at its minimum point.
C) always declines.
D) disappears in the long run.

176. A lumber company that specializes in making pine boards finds it can lower costs by
also making particleboard and paper pulp. This is an example of:
A) economies of scale.
B) diminishing marginal returns.
C) economies of scope.
D) comparative advantage.

Page 51
177. (Figure: Determining Long-Run Costs) Given the information in the graph, what curve
would represent this firm's average cost curve if it were to produce 0.4 units of output?

A) A
B) B
C) C
D) A, B, and C

178. (Figure) The figure shows four short-run average total cost curves for a firm. This firm
experiences economies of scale:

A) up to 15 units produced.
B) from 15 to 21 units produced.
C) over 21 units produced.
D) over the entire range of production.

Page 52
179. (Figure: Interpreting the LRATC) Which region(s) in the graph indicate(s) diseconomies
of scale?

A) A
B) B
C) C
D) B and C

180. Economies of scale:

A) only occur in the short run.
B) lead to lower average costs in the long run.
C) are harmful to firms.
D) suggest that the firm is producing too much of a good.

181. The range of output where long-run average costs tend to increase as production is
increased are:
A) economies of scale.
B) economies of scope.
C) diseconomies of scale.
D) constant returns to scale.

182. If a firm increases its inputs by 80% and its output increases by 60%, then this would be
an example of:
A) economies of scale.
B) increasing marginal returns.
C) economies of scope.
D) diseconomies of scale.

Page 53
183. It can be cost-effective to pursue economies of scale only if:
A) demand is large.
B) demand is small.
C) marginal cost is increasing.
D) marginal product is diminishing.

184. Specialization of labor and management typically supports:

A) overproduction.
B) economies of scale.
C) diseconomies of scale.
D) diminishing returns.

185. Which of these would create diseconomies of scale?

A) ability to easily replicate a business
B) decreasing average fixed costs
C) bureaucracy
D) reductions in long-run average total costs

186. Which statement is false?

A) All costs are fixed costs in the long run.
B) TC = FC + VC.
C) In the long run, all inputs are variable.
D) A fixed cost is a cost that does not vary as quantity produced varies.

187. In the long run:

A) TC = VC.
B) all costs are fixed.
C) average fixed cost is important.
D) TC = FC.

188. Which of these does NOT lead to economies of scale?

A) specialization of resources
B) better use of existing capital
C) increased bureaucratization
D) better use of complementary technologies

Page 54
189. Constant returns to scale are defined as long-run average total costs that:
A) remain the same as output increases.
B) increase as output increases.
C) decrease as output increases.
D) decrease as a firm produces another product.

190. Which of the following contribute to economies of scale?

A) specialization of labor
B) better use of capital
C) complementary production techniques
D) All of these contribute to economies of scale.

191. On a graph of the long-run average total cost curve, constant returns to scale are shown
as:
A) decreasing average costs as output expands.
B) increasing average costs as output expands.
C) constant average costs as output expands.
D) constant output as costs expand.

192. When a firm experiences diseconomies of scale, average costs:

A) fall as output rises.
B) remain constant as output rises.
C) rise as output falls.
D) rise as output rises.

193. A bicycle factory finds that it can lower costs if it also produces tricycles and unicycles.
This is an example of:
A) economies of scale.
B) economies of scope.
C) comparative advantage.
D) opportunity cost.

194. By producing a number of products that are interdependent, firms are able to produce
and market these goods at lower costs. This is known as:
A) economies of scale.
B) economies of scope.
C) diseconomies of scale.
D) constant returns to scale.

Page 55
195. Many cruises start and end trips at ports in the United States, but almost all cruise ships
are registered outside the United States in a process called offshoring. Which of these is
a reason for cruise ships to have their home office officially located in a developing
country?
A) lower material cost
B) availability of a highly trained, literate labor force
C) lower taxes in the United States
D) avoidance of U.S. taxes and regulations

196. Entrepreneurs provide goods and services to markets.

A) True
B) False

197. Sole proprietorships make the most profit out of all forms of business.
A) True
B) False

198. Limited liability is a feature of partnerships.

A) True
B) False

199. Small businesses or sole proprietorships account for 70% of all businesses in the United
States and also account for 70% of all products and services produced in the United
States.
A) True
B) False

200. A sole proprietorship exists when several people unite to jointly own a business.
A) True
B) False

201. Unlimited liability means that the owner of a business is personally responsible for the
debts of the business.
A) True
B) False

Page 56
202. Economists have not been persuaded that alternative behavioral assumptions for firms,
such as sales maximization, yield superior results to the assumption of profit
maximization.
A) True
B) False

203. According to economists, sales maximization is the primary goal of firms.

A) True
B) False

204. Small entrepreneurs who work for free in the early stages of a firm's development do not
count lost salary as an economic cost.
A) True
B) False

205. Firms consider opportunity costs as implicit costs.

A) True
B) False

206. An example of the implicit cost of producing a new product line is the interest that could
have been earned if the funds had been placed in the bank instead.
A) True
B) False

207. Implicit costs are the difference between total profit and explicit costs.
A) True
B) False

208. Arlene makes earrings in the shape of the mascot of a local university. Last year, Arlene
made 250 pairs of earrings, which she sold to the university bookstore for $10 each.
Arlene works out of her home; her only cost is $3 per pair for materials and $85 for tax
help. If Arlene did not produce earrings, she would spend her time watching television.
Based on this information, Arlene does not have any implicit costs.
A) True
B) False

Page 57
209. The salary that the owner of a small business could have made working for another
company is an explicit cost.
A) True
B) False

210. Any business decision should take sunk costs into consideration.
A) True
B) False

211. Sunk costs can also be explicit costs.

A) True
B) False

212. Toyota spent over $1 billion to develop the Prius. For Toyota, the $1 billion was a sunk
cost.
A) True
B) False

213. Normal profits are profits that are in excess of both implicit and explicit costs.
A) True
B) False

214. An economic profit is any profit earned above a normal rate of profit.
A) True
B) False

215. The difference between economic profit and accounting profit is due to the economists'
inclusion of opportunity costs of capital.
A) True
B) False

216. If a firm is incurring an economic loss, it is also incurring an accounting loss.

A) True
B) False

Page 58
217. If a firm earns accounting profits, it also earns economic profits.
A) True
B) False

218. Another term for normal profit is zero economic profit.

A) True
B) False

219. A business owner will always prefer zero economic profit to zero accounting profit.
A) True
B) False

220. The plant size can change in the long run.

A) True
B) False

221. The short run is a period of time over which at least one factor of production is fixed.
A) True
B) False

222. The short run is a period of time over which at least one factor of production is fixed or
cannot be changed.
A) True
B) False

223. The short run and the long run are defined in terms of a specific time period (e.g., five
years).
A) True
B) False

224. The long run is a period of time in which no factors of production are fixed.
A) True
B) False

Page 59
225. High-capital industries require longer time periods to adjust all their resources compared
to those industries that are more labor-intensive.
A) True
B) False

226. If it takes a week to obtain a vendor's license and buy a hot dog stand, the week would
be considered as the long run for the hot dog stand industry.
A) True
B) False

227. In the simplified model in the text, production in the short run varies by the amount of
labor used.
A) True
B) False

228. Because of increasing sales at Dylan's Bakery, Dylan hired another worker. The new
baker was very skilled, but the workspace in Dylan's store is small and they found
themselves getting in each other's way. Sales then declined. Dylan's Bakery is
experiencing negative returns.
A) True
B) False

229. In the short run, output is referred to as average product.

A) True
B) False

230. Average product is equal to labor divided by quantity.

A) True
B) False

231. Hiring additional workers always causes output to rise.

A) True
B) False

232. Average product is defined as the total output divided by number of buyers.
A) True
B) False

Page 60
233. A worker's marginal product is the increase in total profits that results from the worker
being hired.
A) True
B) False

234. If hiring Joe causes average product to rise, then Joe's marginal product has to be
positive.
A) True
B) False

235. A firm faces diminishing marginal returns when every additional worker adds to total
output at an increasing rate.
A) True
B) False

236. Firms should not hire another worker if hiring that worker results in diminishing
marginal returns.
A) True
B) False

237. If a company is experiencing diminishing marginal returns, its average product must be
declining.
A) True
B) False

238. Diminishing returns cannot occur if additional workers are as skilled as previously hired
workers and have a good work ethic.
A) True
B) False

239. Fixed costs include wages for current employees.

A) True
B) False

240. Marginal cost is the change in total cost from producing an additional unit of output.
A) True
B) False

Page 61
241. If producers experienced an increase in the amount of wages paid, they should also
expect an increase in average fixed costs.
A) True
B) False

242. Cost per unit of output is also referred to as total cost.

A) True
B) False

243. In the short run, fixed costs rise as output rises.

A) True
B) False

244. The property tax a company pays on its factory building is an example of a variable
cost.
A) True
B) False

245. Marginal cost is the addition to total cost derived from the production of one additional
unit.
A) True
B) False

246. If the average variable cost for ten pens with the company logo on them is $0.40 and the
average variable cost for eleven pens is $0.42, the marginal cost for the eleventh pen is
$0.02.
A) True
B) False

247. The marginal cost curve and average variable cost curve intersect where the average
variable cost curve is at its minimum point.
A) True
B) False

248. The long-run total cost curve represents the lowest unit cost at which any specific output
can be produced when a firm is able to adjust the size of its plant.
A) True
B) False

Page 62
249. The average variable cost curve intersects the marginal cost curve at the minimum point
of the average variable cost curve.
A) True
B) False

250. There is no point on the total product curve at which both the average and the marginal
products increase.
A) True
B) False

251. By producing a number of different products that are interdependent, a firm can
experience economies of scale.
A) True
B) False

252. At lower levels of production, costs are higher for larger plants than smaller ones.
A) True
B) False

253. Very few industries experience constant returns to scale.

A) True
B) False

254. Easy-to-replicate franchise businesses tend to have economies of scale.

A) True
B) False

255. The short-run cost curve is the envelope of the long-run cost curves.
A) True
B) False

256. Economies of scale lower long-run average costs as output rises.

A) True
B) False

Page 63
257. Specialization of labor is one reason for the presence of diseconomies of scale.
A) True
B) False

258. When economies of scale are present, the average cost is increasing.
A) True
B) False

259. An electronics company that previously specialized in making television sets finds it can
lower costs by making DVD players and car computer systems. This is an example of
economies of scale.
A) True
B) False

260. An aircraft company found that, as it grew larger in size, it could reduce costs by buying
larger, more specialized equipment and taking advantage of specialization of labor and
management. This is an example of economies of scale.
A) True
B) False

261. Most cruise ship lines have their home offices in developing countries to take advantage
of lower costs for materials.
A) True
B) False

262. Many U.S. manufacturing corporations have moved their bases to developing countries
to take advantage of lower costs for labor and materials.
A) True
B) False

263. The majority of the costs for the software industry are the costs of disseminating the
software, which is a fixed cost.
A) True
B) False

264. In developing countries, road crews often consist of a group of workers using hand
tools, whereas in industrialized countries, one sees lots of equipment and a small crew.
Explain the difference in resource usage.

Page 64
265. What roles do entrepreneurs play in the market?

266. Compare and contrast the three major types of firms doing business in the United States.

267. What are the differences between explicit and implicit costs? Provide examples to
support your answer.

268. Use examples to define what economists mean by implicit costs. If there is no dollar
expenditure for these costs, why are they important to decision making?

269. You and a friend go to see a concert, but halfway through the concert, the two of you
find that you do not like the music and you debate whether to leave or stay for the rest
of it. Your friend argues that you should stay since you have already paid for the tickets.
Using the concepts of sunk cost and opportunity cost, how would you respond?

270. What is the difference between accounting profits and economic profits? Include in your
discussion information regarding what constitutes normal profits.

271. Some workers leave a corporate job to start their own businesses. After a few years they
shut the business down and return to work for someone else even though their start-up
may be earning an accounting profit. Using the concept of economic profit, explain this
apparent anomaly.

272. What is the difference between accounting profits and economic profits?

273. Use examples to differentiate between the short run and long run.

274. What is the difference in the short run between total product, marginal product, and
average product?

Page 65
275. Complete the table by filling in the answers for marginal product and average product.
When do negative returns set in?

276. Suppose a firm has the production relationships shown in the table.

Complete the table. Graph the marginal and average product. At which point does the
firm experience increasing returns and decreasing returns? Is there enough information
provided to determine how many workers should be hired? Why or why not?

277. Differentiate between increasing and decreasing returns and include a graph to illustrate
your answer.

278. State the law of diminishing returns. Include a graph to support your answer.

Page 66
279. In the table, over what range of workers does the firm experience increasing marginal
returns? At what number of workers do diminishing marginal returns begin? Are
negative returns shown in the table?

280. Why do firms experience diminishing marginal returns? How is the reason related to the
fixed nature of capital? Does it depend on the work ethic of the workers?

281. Explain why diminishing marginal returns is a short-run concept.

282. Complete the following table by filling in the answers for total product and average
product. Round your answers to whole numbers. Then answer the two questions that
follow the table.

When do diminishing marginal returns set in? _____ worker(s)

This firm should never hire more than _____ workers.

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Answer Key
1. C
2. A
3. A
4. C
5. A
6. C
7. B
8. C
9. B
10. B
11. B
12. B
13. B
14. C
15. C
16. C
17. A
18. D
19. B
20. B
21. C
22. D
23. B
24. A
25. C
26. C
27. D
28. D
29. A
30. B
31. D
32. C
33. C
34. C
35. B
36. D
37. B
38. C
39. B
40. B
41. A
42. A
43. B
44. A

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45. D
46. D
47. B
48. C
49. B
50. C
51. A
52. B
53. D
54. C
55. D
56. C
57. A
58. D
59. D
60. B
61. A
62. D
63. C
64. B
65. C
66. A
67. C
68. C
69. C
70. D
71. B
72. C
73. C
74. C
75. B
76. D
77. A
78. C
79. A
80. B
81. B
82. D
83. B
84. C
85. D
86. A
87. C
88. C
89. B
90. C

Page 69
 91. A
92. C
93. B
94. B
95. D
96. A
97. A
98. C
99. A
100. B
101. D
102. C
103. D
104. A
105. D
106. C
107. D
108. D
109. B
110. D
111. B
112. B
113. D
114. C
115. C
116. A
117. D
118. B
119. A
120. C
121. C
122. D
123. C
124. C
125. C
126. B
127. D
128. C
129. C
130. B
131. D
132. C
133. D
134. C
135. D
136. C

Page 70
137. D
138. B
139. D
140. C
141. D
142. B
143. B
144. D
145. B
146. C
147. D
148. B
149. C
150. A
151. D
152. A
153. B
154. D
155. A
156. C
157. D
158. D
159. D
160. C
161. A
162. B
163. C
164. B
165. D
166. A
167. B
168. A
169. B
170. C
171. A
172. B
173. D
174. B
175. A
176. C
177. B
178. A
179. C
180. B
181. C
182. D

Page 71
183. A
184. B
185. C
186. A
187. A
188. C
189. A
190. D
191. C
192. D
193. B
194. B
195. D
196. A
197. B
198. B
199. B
200. B
201. A
202. A
203. B
204. B
205. A
206. A
207. B
208. A
209. B
210. B
211. A
212. A
213. B
214. A
215. A
216. B
217. B
218. A
219. A
220. A
221. A
222. A
223. B
224. A
225. A
226. A
227. A
228. A

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229. B
230. B
231. B
232. B
233. B
234. A
235. B
236. B
237. B
238. B
239. B
240. A
241. B
242. B
243. B
244. B
245. A
246. B
247. A
248. A
249. A
250. B
251. B
252. A
253. B
254. B
255. B
256. A
257. B
258. B
259. B
260. A
261. B
262. A
263. B
264.
265.
266.
267.
268.
269.
270.
271.
272.
273.
274.

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275.
276.
277.
278.
279.
280.
281.
282.

Page 74